Blasted by Congress, IRS apologizes for lavish events

Jun. 6, 2013 - 06:00AM
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House Committee on Oversight and Government Reform Ranking Member Elijah Cummings, D-Md., expresses outrage over IRS spending on conferences at a hearing. (H. Darr Beiser/USA Today)

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WASHINGTON — The tax official responsible for a lavish, $4.1 million conference in Anaheim apologized to Congress for spending at the conference — and for his performance as Mr. Spock in a “Star Trek” parody video.

“The fact of the matter is, Mr. Chairman, it’s embarrassing, I apologize,” Faris Fink said of the two videos produced for the conference at a cost of $50,187.

Fink, the commissioner of the IRS’s Small Business and Self-Employment Division, donned pointy ears for his role as the Vulcan commander on a mission to bring effective tax practices to a faraway planet. That video opened the division’s conference in 2010 — the most expensive of the 225 conferences audited by the IRS’s inspector general in a report this week.

“I swear to God, I have looked at that video over and over again, and I swear I do not see the redeeming value,” said Rep. Elijah Cummings, D-Md., the ranking Democrat on the House Oversight Committee, which is investigating the $49 million in conference spending by the IRS from 2010 to 2012.

He produced a copy of an email between two Marriott hotel employees in Anaheim, noting that Anaheim’s bid for the conference was $1 million more than Orlando. “This sounds like the hotel employees were mocking you, and even taking advantage of the IRS,” Cummings said.

Chairman Darrell Issa, R-Calif., said the Internal Revenue Service was “effectively guilty of tax evasion” when it gave employees lavish presidential suites, free meals and taxpayer-paid gifts without disclosing that as income. IRS officials said some local employees ineligible for travel expenses were given revised W-2 forms reflecting their expenses as taxable income.

That Anaheim conference cost at least $4.1 million — maybe more. When the IRS’s own inspector general audited the Anaheim conference, he found the documentation lacking, Inspector General J. Russell George told the committee Thursday.

Danny Werfel, three weeks into his stint as acting IRS commissioner, called the conference “an unfortunate vestige from a prior era.” He said the spending “would not occur today.” Wednesday, he initiated termination proceedings against two employees for accepting free food at the conference in violation of ethics rules.

The conferences are the second scandal to break at the agency in as many months, following the revelation that the IRS inappropriately held up applications for tax-exempt status by groups with “Tea Party” or “Patriots” in their names.

Though the incidents are unrelated, both have managed to unite Republicans and Democrats in outrage. Rep. Gerry Connolly, D-Va., said he was “furious” about the overspending — especially since he’s been an advocate for more funding for the IRS.

“Lavish spending on conferences and absurd training videos is a deep betrayal of IRS supporters fighting to secure adequate resources for the agency, a slap in the face to the many dedicated rank-and-file IRS employees who are careful stewards of taxpayer dollars, and an affront to the American taxpayer,” he said.

Members of Congress say the IRS deliberately withheld information about the scandals from Congress. This week, Sen. Tom Coburn, R-Okla., asked for an investigation into why the Treasury Department did not include the IRS conferences in a 2012 report to Congress claiming that the department spent less than $500,000 on conferences over more than seven years.

The Treasury Department says it overhauled its conference policies beginning in 2011, and any conference costing more than $25,000 must be approved by a high-ranking department official. Any conference costing more than $250,000 must be approved by the secretary of the Treasury.

As a result, Treasury spokeswoman Sabrina Siddiqui said, the department held 24 conferences costing a total of $4.8 million last year — down from 152 conferences costing $37 million in 2010.